biz org final prep

Chapter 1

Business

the organized effort of individuals to produce and sell, for a profit, the goods and services that satisfy society's needs

Organized Effort

combining the 4 resources (Material, Human, Financial, Informational)

Satisfying Needs

if you cannot satisfy the consumers, then you won't be able to turn a profit

Material (Resource)

raw materials used in manufacturing processes, as well as buildings and machinery

Human (Resource)

people who furnish their labor to the business in return for $

Financial (Resource)

money required to pay employees, purchase materials, and general business operating costs

Informational (Resource)

information that tells the managers of the business how effectively the other 3 resources are being combined & used

Profit

what remains after all business expenses (labor, overhead, etc.) have been subtracted from sales revenue

Stakeholders

different people or groups of people affected by an org's policies, decisions, and activities

Service Businesses

produce services (haircut, legal)

Manufacturing Business

Process various materials into tangible goods

Marketing Intermediaries

Buy products from manufacturers & resells them

e-business

the organized effort of individuals to produce and sell for a profit, the goods and services that satisfy society's needs through the facilities available on the internet

productivity

the average level of output per worker per hour

Gross domestic product (GDP)

the total dollar value of all goods and services produced by all people within the boundaries of a country during a specified time period—usually a one-year period

Real GDP

used for comparative purposes, adjusted up or down by inflation/deflation to get the real GDP

Inflation

general rise in price of products

Deflation

general decrease in price of products

unemployment rate

percentage of a nation's labor force unemployed at any time

Consumer price index (CPI)

monthly index that measures change in price of standard basket of goods

Producer price index (PPI)

monthly index that measures prices that producers receive for their finished goods

Competition

rivalry among businesses for sales to potential customers

Perfect (pure) Competition

the market situation in which there are many buyers and sellers of a product, and no single buyer or seller is powerful enough to affect the price of that product

Monopolistic Competition

the market situation in which there are many buyers along with a relatively large number of sellers

Oligopoly Competition

a market (or industry) situation in which there are few sellers

Monopoly

a market (or industry) with only one seller, and customers can only buy the product or service from that seller

Product Differentiation

the process of developing and promoting differences between a company's products and all competitive products

Supply

quantity of the product that producers are willing to sell at each of various prices

Demand

quantity that buyers are willing to purchase at each of various prices

Market Price

the price at which the quantity demanded is exactly equal to the quantity supplied

Equilibrium Price

Market Clearing Price (Intersection Point On Supply-Demand Graph)

Chapter 2

Plagiarism

knowingly taking someone else's words, ideas, or other original material without acknowledging the source

Conflict of Interest

when businesspeople take advantage of a situation for their own personal interest rather than for the employer's interest

Bribes

gifts, favors, or payments offered with the intent of influencing an outcome

Social Responsibility

the recognition that business activities have an impact on society and the consideration of that impact in business decision-making

Corporate Citizenship

adopting a strategic approach to fulfilling economic, ethical, environmental, and social responsibilities

Caveat Emptor

Latin phrase meaning "let the buyer beware" (what you see is what you get)

Economic Model of Social Responsibility

the view that society will benefit most when business is left alone to produce and market profitable products that society needs

Socioeconomic Model of Social Responsibility

the concept that business should emphasize not only profits but also the impact of its decisions on society

Consumerism

all activities undertaken to protect the rights of consumers

6 Key Consumer Rights (JFK Consumer Bill of Rights)

Right to- safety, be informed, choose, be heard, consumer edu, courteous service

Affirmative Action Program

a plan designed to increase the number of employees from underrepresented groups at all levels within an organization

Equal Employment Opportunity Commission (EEOC)

a government agency with the power to investigate complaints of employment discrimination and sue firms that practice it

Hard-Core Unemployed

workers with little education or vocational training and a long history of unemployment

Workplace Bullying Institute (WBI)

defines bullying in the workplace as repeated work sabotage; verbal abuse; and/or abusive conduct that is threatening, humiliating, or intimidating

Chapter 3

International Business

all business activities that involve exchanges across national boundaries

Absolute Advantage

the ability to produce a specific product more efficiently than any other nation

Comparative Advantage

the ability to produce a specific product more efficiently than any other product

Exporting

selling and shipping raw materials or products to other nations

Importing

purchasing raw materials or products in other nations and bringing them into one's own country

Balance of Trade

the total value of its exports minus the total value of its imports over a specified period of time

Trade Deficit

a negative balance of trade

Balance of Payments

the total flow of money into a country minus the total flow of money out of that country over a specified period of time

export-import merchant

wholesaler specializing in international trade, assumes all the risks of product ownership, distribution, and sale

Trading Company

provides a link between buyers and sellers in different countries

Countertrade

an international barter transaction in which goods and services are exchanged for different goods and services

Licensing

a contractual agreement in which one firm permits another to produce and market its product and to use its brand name in return for a royalty or other compensation

Contract Manufacturing

an arrangement in which one firm contracts with another business, often in another country, to manufacture products or product components to its specifications

Outsourcing

an arrangement in which one firm contracts manufacturing or other activities to a firm in another country that specializes in those activities and can offer them at a lower cost than domestic firms

Strategic Alliance

a partnership formed to create competitive advantage on a worldwide basis

Direct Investment

company builds or purchases manufacturing and other facilities in a foreign country OR purchase of an existing firm in a foreign country under an arrangement that allows it to operate independently of the parent company

Multinational Corporation

a firm that operates on a worldwide scale without ties to any specific nation or region

Letter of Credit

importer initiates letter of credit, prepared by their bank, sent to exporter's bank

Bill of Lading

from exporter, tells importer merchandise is on the way (in transit)

Draft

request for payment for completed services from exporter's bank to importer's bank

General Agreement on Tariffs & Trade

an international organization of 164 nations dedicated to reducing or eliminating tariffs and other barriers to world trade

World Trade Organization

an international forum that facilitates world trade among member nations by mediating disputes and fostering continued efforts to reduce trade barriers

Economic Community

an organization of nations formed to promote the free movement of resources and products among its members and to create common economic policies

Chapter 4

Sole-Proprietorship

a business that is owned (and usually operated) by one person

Unlimited Liability

a legal concept that holds a business owner personally responsible for all the debts of the business

Corporation

(sometimes referred to as a regular or a C corporation) an artificial person, created by law, with most of the legal rights of a real person

Stock

the shares of ownership of a corporation

Stockholder

a person who owns a corporation's stock

Closed Corp.

a corporation whose stock is owned by relatively few people and is not sold to the general public; (NO IPO) Privately Owned Corp.

Open Corp.

a corporation whose stock can be bought and sold by any individual, IPO & Publicly Owned Corp.

Domestic Corporation

a corporation in the state in which it is incorporated

Foreign Corporation

a corporation in any state in which it does business except the one in which it is incorporated

Alien Corporation

a corporation chartered by a foreign government and conducting business in the United States

Common Stock

the most basic form of corporate ownership and whose owners may vote on corporate policies

Preferred Stock

stock owned by individuals or firms who usually do not have voting rights but whose claims on dividends are paid before those of common-stock owners

Dividend

a distribution of earnings to the stockholders of a corporation

Proxy

a legal form listing issues to be decided at a stockholders' meeting and enabling stockholders to transfer their voting rights to some other individual or individuals

Board of Directors

the top governing body of a corporation, the members of which are elected by the stockholders

Corporate Officers

the chairperson of the board, president, executive vice presidents, corporate secretary, treasurer, and any other top executive appointed by the board of directors

Limited Liability

a feature of corporate ownership that limits each owner's financial liability to the amount of money that they have paid for the corporation's stock

Perpetual Life

since a corp. is essentially a legal "person," a corporation exists independently of its owners and survives them

Merger

the combining of two corporations or other business entities to form one business

Acquisition

essentially the same thing as a merger, but the term generally is used in reference to a large corporation's purchase of another corporation

Hostile Takeover

a situation in which the management and board of directors of a firm targeted for acquisition disapprove of the merger

Horizontal Merger

merger between firms that make and sell similar products or services in similar markets (T-Mobile & Sprint)

Vertical Merger

merger between firms that operate at different but related levels in the production and marketing of a product (Cisco & Small Corp.)

Conglomerate Merger

takes place between firms in completely different industries (Google buying Glasses Company)

Chapter 5

Franchise

a license to operate an individually owned business as though it were part of a chain of outlets or stores

Franchising

the actual granting of a franchise

Franchisor

an individual or organization granting a franchise